Investors Are Valuing OpenAI at Over $100 Billion
Introduction Of OpenAI
OpenAI is rapidly becoming one of the most coveted investments in the tech world. According to sources cited by The Wall Street Journal, the artificial intelligence leader is in discussions to raise a new round of funding at a valuation exceeding $100 billion. This would mark a significant leap from its previous valuation of $86 billion, reported in a secondary sale earlier this year.
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Yet, it appears that some investors are already placing an even higher value on OpenAI. Multiple companies that track or facilitate secondary deals have observed transactions that imply a valuation of over $100 billion. Secondary deals, where investors purchase shares from existing stakeholders rather than directly from the company, are often seen as a barometer of a company’s true market value.
Secondary Market Valuations Soar
Rainmaker Securities, a securities trading firm, has reported seeing bids for OpenAI stock at prices that would value the company at up to $143 billion. Similarly, Caplight, a platform that tracks secondary market data, estimates that OpenAI is worth over $111 billion based on recent transactions and traditional financing rounds.
“There are a lot of investors that really want to be part of this story and want to be an investor in this company,” said Glen Anderson, co-founder and managing partner at Rainmaker Securities, in an interview with TechCrunch. He added that while a $100 billion valuation might seem steep, it could prove to be a bargain if OpenAI lives up to its potential.
Greg Martin, another co-founder at Rainmaker Securities, noted that while OpenAI’s valuation has risen quickly, so has its revenue. Despite significant cash burn, the company is reportedly on track to hit $2 billion in annual recurring revenue (ARR) by the end of the year, according to The Information.
“There is a fear of missing out on the premium the company is getting,” Martin said. “There is certainly a cogent argument that the company could be worth a trillion dollars someday.”
Big Names Eyeing OpenAI’s Next Funding Round
The forthcoming primary funding round, rumored to be led by Josh Kushner’s Thrive Capital, is expected to attract other big names in the tech industry. Microsoft, Nvidia, and Apple are all rumored to be potential investors. Thrive Capital alone is reportedly set to invest $1 billion into the AI giant.
This funding round could have broader implications for the AI sector. As Greg Martin pointed out, it will likely spark more secondary market activity not only around OpenAI but also among its competitors, including Anthropic, Cohere, and Hugging Face. “It generates buzz. It generates excitement. It resets market expectations,” Martin said.
Conclusion
As OpenAI continues to push the boundaries of artificial intelligence, its valuation is soaring to unprecedented heights. With secondary market activity indicating a value well over $100 billion and a new funding round on the horizon, investors are eager to secure their place in what could become one of the most valuable companies in the world. Whether this valuation is justified will depend on OpenAI’s ability to sustain its rapid growth and fulfill its lofty ambitions in the years to come.